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The Vicar of FIBLEY

The Vicar of FIBLEY

Can ESG really save the world?

(first published March 2021)

A satire in 4 parts exploring Environmental and Social Governance (ESG) - Can it really save us from environmental disaster? Part 1. Larry Fink - The Vicar of FIBLEY? Imagine if Larry Fink hadn't become the CEO of BlackRock, the most powerful financier in the world. Imagine instead that he’d chosen the life of a clergyman administering to the well-healed flock of a home counties village just beyond the M25. It’s a tough ask, but bare with me. Each Sunday, from the pulpit of the quaint parish church of St.Fiduciary and St. Prudence he expounds the virtues of good clean financial living and the benefits of a righteous and properly audited P&L account. Within this idyllic setting one of the highlights of the parish year is the annual village fête at which the good Reverend judges the cake competition. This may not sound too onerous a task, yet, in previous years, our epicureanally challenged priest has made some devastatingly bad choices when handing out the 'Cake of the Year' award. Take the 2015 winner; the ‘Volkswagen Soufflé’. Larry’s better judgment went out the window when he laid eyes on this entrant's inflated size, immediately awarding it First Prize. Yet, moments later, the congregation watched in horror as Fink dug into the puffed-up confection only to be blasted by a cloud of foul smelling gas, filling the marquee with asphyxiating odours. The entire membership of the Ladies Circle had to be compensated for the distress caused - an incident they still refer to at their coffee mornings as the 'emission scandal’. Then there was the unfortunate 'Deepwater Flambé' of 2010. To most observers, this was a disaster waiting to happen yet, to Larry, this piece of baking bombast represented the 'show stopper' he’d been looking for to promote his 'save the steeple' fund. Who can now forget the fireball which burst from the chocolate fountain when the candles were lit? Certainly not its creators, Brian and Petronella (better know in the Conservative Club as BP), who had to pick up the hefty $14 billion fine for contaminating the village water supply. For BP this was truly a fête worse than death. (b'dum tish) I could go on... The giant 'Enron Bubble' anyone? A failed attempt to put the parish on the map by baking the world's biggest pyramid cake. Or, indeed the 'Boeing Bombe'; a rushed entry in the 2019 competition. So hurried that this flight of fancy ended up in a heap on the floor with truly horrible consequences. The post-mortem suggested it had been rushed through without proper checks. With such a miserable track record, is it any wonder the Rev. Fink is now more circumspect when handing out the gongs? Indeed, since 2019, he has insisted all entries must now contain high levels of the ESG - the latest 'must have' ingredient for anyone interested in making lots of dough, bread and other baking-related euphemisms. Indeed, the Venerable Fink nowadays misses no opportunity to expound the virtues of ESG which, he claims, makes the world a better place. Problem is, although there is much fanfare about the benefits of this mysterious substance, few, if any (and least of all Fink), know exactly what it does or how to measure it. Predictably a multitude of self-styled experts have entered the tent claiming to know the secret ESG formula and how to get it, but if this were true, you'd expect there to be more agreement on the fundamentals, such as ingredients or quantities to use. No such guidelines yet exist. And what exactly does ‘ESG’ stand for anyway? While the agreed terminology seems to favour some form of 'Environmental and Social Governance', others suggest it's really short-hand for 'Encourages Solid Growth' or 'Evangelical Spreadsheet Gratification', while more cynical observers feel it’s more likely to mean 'Evade Superficial Guilt' or even 'Elaborate Signalling Gambit’. Whatever its meaning, the Right Reverend Fink has taken this ethereal substance to heart, seeing it both as an insurance against future scandals of the sort just described and, more importantly, as a means of attracting still greater contributions to his cake stand. It's no coincidence that it was only after Larry had been shown a (pie) chart suggesting ESG-accredited products attracted up to 15% more interest than more boring 'legacy' options that he really saw how ESG represented the future. Yet, despite all of this seeming good news, some within his congregation still questioned the Rev's new-found zeal. What exactly lies behind his Damascene Conversion? After all, prior to his epiphany, Larry had been more than happy to 'follow the money'.

Some sitting in the pews on the left point to Fink's unhealthy and persistent interest in weapons manufacturing, a predilection he defends in his sermons by claiming they contribute to a safer world. So much for turning swords into ploughshares. And he's more than happy to turn a blind eye to slights-of-hand such as carbon offset schemes, which effectively transfer domestic problems to other parishes.

So are we now expected to believe his newfound fascination with ESG is driven by a concern for the health of his flock or does he remain primarily interested in the health of their bank balance? Some argue this amounts to the same thing while others point out that hedge funds can't thrive if real hedges don't survive. With this in mind it's fair to ask whether this turbulent priest's pursuit of ESG goes any further than the fiscal. Is he the conscience of the free-market - a sort of Chaplain of Industry - or merely the unfunny Vicar of FIBLEY? Does it even matter?

So long as the flock feel safe in his hands AND continue to invest in his steeple fund what's not to like? In the final analysis, as you might have guessed, it's a curate's egg: Good in parts. Fink's new evangelism is a win-win for the financial and investment community. Making money for his congregation while seeming to care about the parish.

In this respect the very Reverend Larry Fink is truly preaching to the choir. Still to come: Part 2. Consultants on the vicarage lawn Part 3. What the papers say - a cub reporter from the local paper investigates Part 4. Does ESG really make the perfect cake?

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